4 Reasons Immigrants Will Help Samsung And Motorola Win The Tablet War Against Apple

There’s little question that tablet adoption in the U.S. is on the rise. According to recent reports, 4% of Americans now claim ownership of tablets and 5% own e-readers, representing nearly 1 out of 10 Americans or approximately 30 million. (2010 census data shows U.S. as having a population of 308 million and growing.)This figure is surprisingly high considering that tablets and e-readers such as the iPad, Kindle, and newer devices such as Galaxy and Xoom are new arrivals to consumer technology markets; however, what’s even more surprising is that it pales in comparison to U.S. immigrants, 13% of which claim to own a tablet device.*

According to the latest census data, there are approximately 38 million immigrants (both legal and illegal) in the U.S. This segment could play a pivotal role in the tablet race. They could be the ‘Ohio’ or ‘Florida’ in a long battle for the post-PC consumer.

With iPad 2 hitting shelves last Friday, there is once again renewed interest in tablets and upcoming devices, but as combatants like the BlackBerry Playbook, Motorola XOOM, Palm Touchpad and major OEMs like Samsung and Toshiba brace themselves for the next phase of the tablet wars, they may want to re-think how they market these devices to U.S. immigrant consumers, which could very well determine who is positioned best to gain a stronghold in the market.

Here are four reasons why tablet producers need to win the immigrant segment:

1. Early adopters and software–centric culture

Many U.S. immigrants and non-native residents from countries outside the U.S. are often early adopters of technology. This may not be news to some, but despite American innovation, the U.S. still lags behind other, less affluent markets. Is there any wonder why there is such a high concentration of software developers in countries like China, and India?

According to a recent study by comScore, Europe remains the second largest digital market in the world behind Asia Pacific, as marked by their history of embracing new online and mobile technology. This early adopter mentality is critical for achieving success in the marketplace, especially when rapid innovation and short product cycles are common.

2. Brand loyalty, reach and critical mass

Unlike most Americans who have a wealth of choices available, immigrants have a higher tendency for brand loyalty and tend to be more frugal. Product innovation is slower in emerging countries and longer product life cycles mean that companies like Sony, Nokia, Google, and Apple are able to sustain higher market share for longer periods of time, which also increases the barrier for new entrants.

Apple has jumped to an early lead, as revealed by a January 2011 In-stat report, which shows that 40% of future tablet purchasers in the U.S. are planning to buy an Apple iPad.

However there’s still plenty of opportunity for Android developers to make ground with attractive price points that are well below Apple’s iPad. An IMS Research forecast predicts by the end of 2011 there will be an installed base of 140 million Android devices – from smartphones to tablets, which is great news for manufacturers like Motorola and Samsung who are looking for critical mass.

This type of reach means operators will continue to develop apps that give consumers greater control over multiple platforms. And interoperability with other devices like smartphones and media players means businesses stand a lot to gain from staying loyal to Android’s open architecture.

3. Advanced mobile infrastructure

Many immigrants to the U.S from Europe and countries like South Korea, Israel, and China that have leapfrogged into more advanced wireless network technologies are likely to demand more advanced services. Video calling, and front facing cameras have been around for years in Europe and Asia, whereas 3G and 4G networks in the U.S. and North America are just now starting to take off.

A November 2010 report from In-Stat predicted that mobile video calling would hit revenue of $1 billion by 2015, with the Asia-Pacific region consuming as much as 53% of the mobile video calling minutes used by 2015.

This higher rate of usage and years of experience embracing feature-rich functionalities like video calling, office suites, web browsing, games and apps makes them ripe candidates for tablet manufacturers looking to capitalise on this next phase of growth.

4. Heavy reliance on tablets, e-readers and mobile devices

Whether you agree or disagree with Mark Zuckerberg’s assertion that the iPad is not a mobile device, for many U.S. immigrants, it absolutely is. Immigrants in the U.S. tend to travel extensively, and this is especially true of young business executives and other affluent consumers who’ve been cited as the primary reason why print newspapers and magazine readership is on the decline.

According to a 2010 Ipsos Mendelsohn Affluent survey of heads of households making $100,000 or more a year, readership among the affluent dropped 16% from the previous year, while the group spent 12% more time using the internet, marked by increases in purchases of e-readers and tablet computers.

Not coincidentally, this demographic rely heavily on mobile devices to stay in touch with families and friends overseas, and are less confined to their work desktops and home PCs for communications. They tend to be more mobile, and far more open to new technology to help them save money.

IDC’s latest research shows that approximately 30 million media tablets and eReaders were shipped in 2010, with the United States representing the largest market. The same report projects tablet shipments will balloon to 50 million units by the end of 2011. This puts tremendous pressure on manufacturers in the near term to compete for the consumer market before tablet saturation becomes an issue.

Samsung’s Galaxy Tab was fairly early to market, which puts them in an enviable position against some of the other players whose products have yet to hit the market. However, if they or other companies such as Motorola, truly want to compete with iPad’s dominance in terms of market share, targeting the U.S. immigrant population just might be the best place to start.

* Based on a recent Rebtel study based of 1340 responses from immigrant users in the U.S.

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